Campbellsville Tel. Co. v. Lebanon, L. & L. Tel. Co.

Decision Date18 May 1904
Citation118 Ky. 277
PartiesCampbellsville Tel. Co. v. Lebanon, L. & L. Telephone Co.
CourtKentucky Court of Appeals






This is an appeal from a judgment dismissing plaintiff's petition, which, after being amended, was still held to state no cause of action. From the statements of the petition it appears that appellant, the Campbellsville Telephone Company, built an exchange at Campbellsville; that appellee, the Lebanon, Louisville & Lexington Telephone Company, built an exchange at Lebanon. These two companies agreed to unite their lines at Phillipsburg, which was a point about midway between Campbellsville and Lebanon; the Campbellsville Company building the line from Campbellsville to Phillipsburg, and the Lebanon Company, by which name we will designate appellee, from Lebanon to Phillipsburg. This diagram fairly presents the geographical situation:


The agreement under which this connection was made and was to be operated was written, and is as follows: "It is hereby mutually agreed by and between the Lebanon, Louisville & Lexington Telephone Company (incorporated) of Lebanon, Kentucky, and the Campbellsville Telephone Company (incorporated) of Campbellsville, Kentucky as follows: The Lebanon, Louisville & Lexington Telephone Company to build, equip and maintain a first-class telephone line from Lebanon, Kentucky, to Phillipsburg, Kentucky, to meet and attach to the line of the Campbellsville Telephone Company at said place; and the Campbellsville Telephone Company to build, equip and maintain a first-class telephone line from Campbellsville, Kentucky, via Spurlington to Phillipsburg, Kentucky, to meet and attach to the said line of the Lebanon, Louisville & Lexington Telephone Company at that place, each company to keep its part of said line in good repair at its own expense. Each company to have all the receipts for business which goes over only that part of the line belonging to it; and the receipts for all business which goes over all or any part of the line belonging to both companies shall be equally divided between them. Rates of toll to and from all points on these lines to be fixed by mutual agreement between the companies. Accounts between the companies to be settled monthly. Signed in duplicate this April 26th, 1896."

There are two points in the foregoing contract that have given rise to this controversy: (1) It failed to state for what length of time the connection and the agreement were to continue. Appellant contends that it was to endure at least during the corporate lives of the two companies. Appellee contends that it was determinable at the will of either of the parties. (2) Did the contract include messages originating elsewhere than at Lebanon or Campbellsville, or on the line between those points? Appellant affirms that it did. Appellee insists that it did not.

The trouble between the litigants came up in this way: They were each "independent" companies; that is, not using the Bell patents. Subsequently a licensee of the Bell patents, the Cumberland Telephone & Telegraph Company, acquired a controlling interest in the stock of the Lebanon Company, and built a line from Louisville to Lebanon, there connecting with the Lebanon Exchange. Later an independent line was built from Louisville to Campbellsville by the Independent Long Distance Telephone & Telegraph Company. Until then the customers of the Campbellsville Exchange used the line in connection with the Cumberland Company's line to talk to Louisville, and customers of the Cumberland Company used the same lines in talking to persons at Campbellsville and contiguous connected points through the Campbellsville exchange. This was all done under the contract quoted. But when the independent line was built to Campbellsville from Louisville, and the Campbellsville Company effected arrangements with it for transmitting messages to and from Louisville, and when it was attempted to use the joint line of these litigants via Phillipsburg to transmit messages from Louisville to Lebanon by way of the Independent and the Campbellsville Companies, appellee refused to make the connection at the Lebanon exchange and excluded the messages. This suit was for a mandamus to compel the Lebanon Company to receive the messages over its wires, and to make the necessary connection therefor. The specific execution of the contract was thus sought by appellant.

If the contract and all rights under it are determinable at the will of either party, appellee argues that will end this suit, for, it is claimed, a court will not direct the specific execution of a contract that either party has the right to terminate the next moment. However, if the parties have not terminated the contract, as they have not in this instance, but are continuing it, and if one of them withholds a part to which the other is entitled, we perceive no good reason for refusing to compel him to bring up his end of the agreement, so long as it lasts. While the case might be rested here, we are not content to do so, but will decide the larger question, which is also presented, and which has been ably argued and fully considered; that is, whether the contract is one determinable at the will of either of the parties.

The fact that no time is fixed in the contract for which it shall endure is seized upon as affixing it to that class of contracts that run at the mutual will of the parties, and that may therefore be terminated when either of them elects to do so. The intention of the parties at the time of the making of the contract, to be gathered from its terms, and the surrounding circumstances, is the thing to be sought for and enforced, if enforceable. That certain agreements are to continue only so long as the parties to them mutually will, is necessarily true. Such agreements may be lawful, and when so, and found to exist, are to be construed and enforced according to their true intent. But whether such was or was not the intention of the parties ought not to be settled alone by the presence or absence of a definitely stated term. If the intention be manifest otherwise, it is as controlling. In Smith v. Theobald, 86 Ky., 141, 9 R., 449, 5 S. W., 394, a contract for personal services of one as a hotel clerk, nothing being said in the writing as to the time it was to run, was construed not to be terminable at the will of the landlord. The court declared that the question of duration intended by the parties was one to be determined from the circumstances of each case. And this must be so. Otherwise the intention of the parties would be ignored, and there would be substituted instead an arbitrary rule of construction frequently defeating the intention and doing great injustice. This contract evinces a purpose to make a telephone connection between two towns in which respectively the parties owned and operated telephone exchanges. To build the connecting line as contracted necessarily required the outlay of a considerable sum, at least as proportioned to the income from it for a year or less. To say that the parties mutually intended that either of them might quit the arrangement the next day after the line was built, thereby practically destroying the value of the connecting line, would be preposterous. The contract provides for monthly settlements, which of itself indicates a protracted duration. The nature of the business was such that the more extended the service afforded its patrons, the more desirable it became to...

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